The pound euro (GBP/EUR) exchange rate is edging higher after losses last week.
The pound weakened last week after softer UK data strengthened expectations of further Bank of England rate cuts. Unemployment rose to an almost five-year high, wage growth slowed, and inflation cooled to 3%, with markets pricing in a March rate cut.
This week’s quiet data calendar shifts focus to political risks ahead of the Gorton and Denton by-election on February 26, which could test PM Starmer’s position.
The euro is slipping amid rising trade-tariff turbulence, as the EU pushed back against newly proposed US tariffs after the US Supreme Court ruled that reciprocal tariffs are illegal.
German IFO business climate rose to a 5-month high of 88.6 in February up from 87.6 amid signs of a recovery.